NGD (another new top 10 position for me):
I just bought this yesterday at $3.08.
Here is why I like NGD:
1) NGD is probably the lowest cost gold producer in the world. NGD has two of the best assets in the world at New Afton and Rainy River. New Afton has negative cash costs due to the huge amount of copper produced at the mine. Rainy River is a high grade mine and is just starting to ramp up.
2) As mentioned Rainy River is just ramping up, but the thing has been a mess. They ran into a few issues at the mine that resulted in a cost overrun and a delay in start up. As a result they had to raise some equity and the stock tanked (but didn't break new lows).
3) NGD has a huge deposit at Blackwater that the company's stock is getting no credit for. Blackwater has 8.2 MM oz of gold reserves in British Colombia.
4) Now that Rainy River is complete, NGD is going to be a free cash flow machine! NGD should generate nearly $500 MM in EBITDA in 2018 which means it is trading at ~5x EBITDA on spot prices. If gold prices went to something like $1500, then NGD is trading at like 3x EBITDA. With projects virtually done, I think NGD could generate ~$300 MM in FCF in 2018 and 2019 (18% FCF yield).
5) I think NGD is a prime takeover candidate. Balance sheets in the gold space have significantly improved over the last few years as many of the majors have sold assets and cut (some) costs. I think this opens the door for someone like Newmont to buy New Gold (even their names are made for each other!).
6) The stock has been getting crushed and is going to find some support soon (IMO). The RSI is at 34 and is now only about 10%-15% off of the bottom from earlier this year. If it got close to $2.70, I'd buy more.
Just trying to make a few bucks.
